My pleasure.

“I don’t see the relevance of your personal intellectual history.”

Why would you? As I’ve said before, I’m a nobody.

“That is one possible explanation. Others reading your screed might formulate others.”

Yes, it was quite long, but the participants seemed to be enjoying themselves at the time. It appears your formulation is not favorable.

“relevant to what?”

Apparently for you, nothing.

“Except that I published her just recently in my journal.”

Yes I know. I probably don’t need to point out that my comment was not directed at you, it was in another thread above this one.

I presumed you would be familiar with her. I was merely pointing you back to how the slavery reference came up, and how she uses unilateral transfer in a way that is consistent with Mises’s description of “external markets”. In both cases, output is not equal to income. That is another way to conceptualize this.

“Respectfully,”

Really?

“Only the last line.”

That’s what I had guessed.

Perspicacious nym!

“I don’t understand what this sentence means.”

IP law exists. You don’t think it should. You draw on Rothbard’s homesteading principle to support your arguments. You included Rand on your “absurd arguments” list, so I presume you take issue with OE. You create a rationale that is consistent with Rothbard, and particularly Ancap ideology, in your arguments against IP. I call this “Kinsellian” ethics for short.

Thank-you.

Ideologies like OE and Ancap attempt to redraw the ethics of society along lines that are sometimes at odds with the status quo. I argue that they are also at odds, on occasion, with Mises’s analysis of economics. I did not start out trying to defend a particular point of view. See?

Not quite. I don’t see the relevance of your personal intellectual history.

Well, I tried to explain it. It’s hard to catch the plot of a book if you only read the last line.

That is one possible explanation. Others reading your screed might formulate others.

Anyway, Mises does a much better job than I. Here is a relevant quote from Human Action:

relevant to what?

Mises described this as producing for an external market. It is a practical definition of slavery, although the producer can just decide not to be a slave, since there is no incentive to be one. Kathleen Touchstone, who I suspect you have not heard of, calls this a unilateral transfer, like charity.”

Except that I published her just recently in my journal.
Respectfully,

“Only the last line.”

That’s what I had guessed.

“I don’t understand what this sentence means.”

IP law exists. You don’t think it should. You draw on Rothbard’s homesteading principle to support your arguments. You included Rand on your “absurd arguments” list, so I presume you take issue with OE. You create a rationale that is consistent with Rothbard, and particularly Ancap ideology, in your arguments against IP. I call this “Kinsellian” ethics for short.

Ideologies like OE and Ancap attempt to redraw the ethics of society along lines that are sometimes at odds with the status quo. I argue that they are also at odds, on occasion, with Mises’s analysis of economics. I did not start out trying to defend a particular point of view. See?

“I don’t understand your question.”

Well, I tried to explain it. It’s hard to catch the plot of a book if you only read the last line.

Anyway, Mises does a much better job than I. Here is a relevant quote from Human Action:

****It is beyond the scope of catallactics to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents. It has merely to stress the point that this is a problem of delimitation of property rights and that with the abolition of patents and copyrights authors and inventors would for the most part be producers of external economies.*****

Here is the link: http://mises.org/humanaction/chap23sec6.asp

Here is something I said early on in this thread:

“Mises described this as producing for an external market. It is a practical definition of slavery, although the producer can just decide not to be a slave, since there is no incentive to be one. Kathleen Touchstone, who I suspect you have not heard of, calls this a unilateral transfer, like charity.”

Respectfully,

“I’m just curious, did you read through this discussion, or only the last line?”

Only the last line.

“I did not begin with a set of new ethics that attempted to redefine reality, Rothbardian, Randian or Kinsellian.”

I don’t understand what this sentence means.

“What do you call production for an external market?”

I don’t understand your question.

I’m just curious, did you read through this discussion, or only the last line?

Unlike you, I am not an IP expert. But, out of curiosity, I studied your paper, tried to make it wash with Mises, actual IP law, other legal theories of contracts, property and torts, and common sense.

I did not begin with a set of new ethics that attempted to redefine reality, Rothbardian, Randian or Kinsellian.As I followed the thread of my own reasoning, this is where it led me. When I encountered conflicts between my understanding and experience, the intuition of common sense, I explored it. That’s all.

I did not start out trying to show that you are right or wrong. I was just asking. This is the result of my inquiry.

So I have a question for you.

What do you call production for an external market?

Well, that’s better than pedophilia, I guess. (See Absurd Arguments for IP.)

*****”This is a purely metaphorical and metaphysical assertion.”

This may be true, but it is not my metaphor or my metaphysics. I pulled directly from Mises. (see also my response to Peter; HA p. 141) But you do raise a couple of important issues; What are intangible goods, and what is the relationship between a contracts and laws?

******”Property is either in things that are tangible (i.e., in things for which rivalry of use is at least a possibility, if not an immediate reality),”

Tangible means capable of perception by the senses. Tangible property is subject to the legal theories of tort, property and contracts. In other words, since we can see and touch it, we can develop rules to deal with it. I think you agree.

*****…”if it is intangible, then it is based (at its origin) on a right of contract, such as a bond, a corporate share, a promissory note, or an option to buy something at a certain price. Such a right may be memorialized in a written document, but it is the intangible right that can be treated as though it were a form of property.

Intangible means the opposite; they are not perceptible by the senses. But this does not mean they don’t exist, or that they have no function. You seem to agree with that, given the examples you have used to demonstrate the nature of contracts affecting intangible goods. These intangible goods have enforceable rights in the same way that real property has enforceable rights. We can generalize both tangible and intangible rights as “property rights” whose ownership is enforceable through a theory of contracts “law”.

Now I don’t know how much you actually know about the operation of IP laws, and at this point I claim nothing more than perhaps slightly more than the average layperson, but IP law, especially patents and copyrights, operate in exactly this way. Although they create rights in the intangible, these rights are only manifest when the intangible is “fixed” in a tangible good that makes them perceptible by humans.

So, Mises in his treatment of production, and IP law in its treatment of intangible goods, recognize that it is not necessary to solve the “metaphysics” of the intangible goods. It is only necessary to recognize that they exist, and their existence can be perceived when they become an integral part of tangible goods; Mises referred to “production” and IP law refers to “expression”. When intangible goods are expressed by “creating” tangible goods which express them (make them perceptible, i.e. tangible), then and only then can the attributes of property rights be affixed. This is handy, because we already know how to deal with tangible goods and property rights therein.

*****”I do not see how a property right can arise in any other way, other than when it is ultimately grounded on either: (a) a rivalry over use (which can only be in tangible things), or (b) a contract (which can only be applied to those who’ve consented to be so bound).”

Let’s go with your premise; these are the only two ways property rights can arise. Tangible goods present the potential for conflicts over ownership, i.e. exclusive possession and use. These rights are fixed by way of “good title”. If one has good title in a tangible good, he has a monopoly property right in it. Rules (dare I say “laws”?) are based on contract, property and tort law.

Property rights in intangible goods can arise by contract. Contracts require an offer, acceptance and consideration. When a contract is devised to cover an intangible property right, the concept of property and title transfer is required, otherwise there is no way to enforce what is agreed upon. So, if contracts can transfer title in intangible goods, such title must exist and must be owned before a transfer can be accomplished, or a promise to transfer can be enforced upon default.

Acceptance of an offer establishes consent to the terms of transfer of consideration, say a certain intangible good for a certain amount of money. Only those in privity (i.e. parties to the contract) are bound. Parties to a contract cannot bind a third party who is not “privy” to the contract.

I think there is some consensus even among IP opponents that parties to a contract may transfer title to a good, comprised of both tangible and intangible goods, on condition that only certain rights of property are being transferred. In the case of real property, for example, the title to the land may be transferred, while the title to an easement crossing that land is not. Or the surface of the land may be transferred, but the mineral rights may not.

How does this affect third parties not in privity to the contract? Well, it doesn’t. Someone that is not in privity to the contact has no interest in what is being transferred. Not being a party means he has no standing to claim rights to the property being transferred. So, anyone “inside” the contract is bound, and anyone “outside” has no standing.

The fact that he later trespasses on the property does not given him any rights he did not have before he trespassed. He cannot claim any rights of property in the land, mineral or otherwise. This lack of standing has nothing to do with what is being transferred by the parties. If it is a gold watch instead of land, and the watch is left on a park bench, and the watch has the name and address of the owner inscribed on the back, this does not make it his watch. The watch belongs to the owner, until sold or abandoned.

*****”IP does not depend on either tangibility (only this metaphysical notion of “mixture of tangible and intangible), nor does it arise from any contract, which obviously would require an explicit agreement with a particular person, unlike property rights, which apply to everyone regardless of their consent.”

First, IP law does depend on tangibility. Although the property rights are concerning the intangible aspects, they are only manifest when the intangible is “expressed” by way of a tangible good. As Peter keeps saying, tangible goods are already covered by property rights. Maybe this is what he means. But the INTANGIBLE aspect is only recognized by contract, following your premise above.

Contracts in fact create property rights. That is exactly their function. They can create rights in anything, tangible or intangible. As Mises has argued, anything that is not naturally occurring, i.e. a natural resource is the output of a production process.

Production is put into motion by the intangible actions of human “creativity”, meaning whatever happens as the result of human action prior to the act of production. It is not necessary to nail down exactly what this is. You know and I know that production does not spontaneously manifest goods. It is a human action, and requires human rationality, which is intangible. If a human body is the tangible good, the rational capacities of human action are their intangible component. One is merely an aspect of the other. They are inseparable and fully integrated.

***** “Your suggestion that property rights are a “human device” strikes me as an unprincipled rationalization for claiming that rights can be defined in any way that you (or we, or some unspecified person) wants them to be. It is an assertion that is ultimately based on utilitarianism.”

Would you agree that contracts are a human device? If contracts can create property rights in intangible goods, then how is this “unprincipled rationalization”? However, they cannot be defined anyway “we” want. By the nature of a contract, there must be mutual consent. Mutual consent implies a mutual acknowledgement of “justice”. When one party to a contract can force the other to sign, it is called “adhesion”. Contracts formed under such unfair circumstances are void. In the absence of this type of coercion, there is presumed consent. Mutual consent with consideration makes for an enforceable contract. Once in place, the parties can be said to have mutually acknowledged the property rights inherent in the deal.

One who has property rights has a monopoly with regard to all other claims to that specific property. These property rights did not arise through an act of homesteading. They arose through the mutual agreement of the parties to a contract concerning the transfer of title. Because such a contract is a “human device”, the subject matter of that contact, respective property rights, are also a human device. Such human devices as contracts and property rights enable trade, which is in itself an act of cooperation. Without a prior agreement on the boundaries of the property being traded, no such contract would be possible. This is the true nature property rights. They arise for the purpose of human cooperation and trade under express or implied contract.

If a contact was not enforceable in a legal sense, it would still be immoral if breached. (I know Rothbard disagrees, but only in terms of “human will” and the consequences of breach) It is immoral to take a good and refuse payment for it. Morality is the essence of legality. Legality does not create morality. At least in the case of common law, there is a casual link between morality and legality, and it flows in a direction from ethics, to morality, to legality. This causal chain between ethics, morality and legality has utility to the enterprise of human cooperation. Human cooperation is the essence of the theory or the division of labor, and this is the foundation for economic systems. Economic systems are the in the nature of society. Laws encompass the domains of contracts, property and torts.

*****”One of the reasons I cannot agree with you is that you keep switching between this utilitarian rationale, and a principle-based, moral, natural-rights rationale (e.g., when you say that being unable to own the entirety of one’s intellectual output makes you a slave). You appeal to principle and morality to make some of your basic points, but then you fall back on utilitarianism to close your circle, and defend the contradictions and holes in your argument.”

I don’t understand why this confuses you. Utility is a foundation concept of economics. Marginal utility is the cornerstone of economic calculation. Value is a function of utility. We seek things that have utility. Utility is considered desirable, and motivates human action. Humans act to relieve some sense of discomfort. The utility of this relief is relative to the disutility of labor.

Humans are rational. Rationality is intangible, but it is real, and is the source of subsequent human actions. Cooperation has utility. Conflict is antithetical to cooperation. Therefore, humans devise ethics and morality in order to facilitate cooperation and avoid conflict. Morality is a code of conduct. Failure to follow this code is a breach of utility. Morality and utility are intertwined in human society.

*****”I think this problem is also relevant to your argument that I am making inconsistent assertions that (a) a decree of monopoly privileges deprives everyone who doesn’t get the privilege of some measure of their property rights, and (b) that a hotel owner is a 100% holder of all rights in the building, including the monopolistic right to sell the rooms.”

If (b) is true, then it is ethical. If others conduct themselves in conformance with these ethics, they are moral. If moral conduct facilitates cooperation, it has utility. Property rights are moral because they have social utility. They would not have this utility if they were immoral. That is, if the ethics from which they arise were “unjust”, people would be unwilling to conform their conduct to them. Whether justice is established by royal decree or by Crusoe’s good fortune to have arrived before Friday, what difference does it really make in the final analysis? This is precisely the point Mises is making in his discussions of property. Even if the distant origins of title are somehow unjust or illegal, in a free market, continued ownership is a function of the free market, and the sovereignty of the consumer. To hold otherwise is to contradict the economic forces of a free market.

*****“I contrast this situation to a company getting a piece of paper from a king that says that Company X has the exclusive right to buy and sell all of the wheat in some territory,”

You are correct if you are saying that if “His Highness Obama” decreed that from today forward, all selling and buying of wheat will be the monopoly privilege of “Lady Hillary”, that there would be moral outrage. However, you seem to be equivocating this with the morality of contemporary property ownership rights. Such a decree would never survive today.

If you are suggesting that IP law is such a decree, then let me offer this: What is the difference between a contact which establishes property rights, and a law that does the same?

Imagine…

I own a book. It explains the secrets of life. There are 1,000 people with me on a desert island. I offer to sell copies, but without the right to make other copies. One person agrees. I offer a copy, under contract, for $1,000 dollars. Ouch! We negotiate. What if two people sign the contract? Ok, $600 each. What about 500 people sign up? $2.50/copy. I say no deal. If I sell this book to half of you, it won’t be long before the rest get the secret for free. That makes them free riders. I did not write this book just to give it away to an external market. I will not sign a contact unless all 1000 of you sign it. If you all do, then $1.75/copy.

If 100% of consumers agree to a contract which defines the property rights in my book, then what do I call that type of contract? Law. A contract that covers 100% of the parties is a law that affects everyone equally. The next book that is published will follow the same course. This is an example of universal property rights being established without an act of homesteading, but by an act of law.

*****”it is only necessary to show that your title is better than someone else’s.”

Yes, if you trace this scenario back to the original title holder (me), there is no dispute that I had the better title before any copies were made.

*****”I do, however, still stand by my position that one of the ways that someone can acquire title is through homesteading,”

I agree that an act of homesteading, as conceptualized by Rothbard, would establish “better title” than anyone else. However, I have also demonstrated that title can be established by contract, and 100% coverage of all parties is equivalent to a law. It does not require royal decree. If homesteading is not present, property rights can still exist, and the issue remains one of “better title”.

Therefore, the ultimate challenge is to argue why IP should be subjected to a different property ethics than any other property. I think this is impossible, and in fact to do so by any means would be to create an ethics which endorses production for external markets. Without appeal to morality or utility, I have simply stated that production for external markets is in fact, slavery.

Therefore, as ironic as this may sound, IP opponents find themselves in the curious position of advocating slavery.

This is a good post and I intend to give my full attention. Thank you.

This is a purely metaphorical and metaphysical assertion.

Property is either in things that are tangible (i.e., in things for which rivalry of use is at least a possibility, if not an immediate reality), or if it is intangible, then it is based (at its origin) on a right of contract, such as a bond, a corporate share, a promissory note, or an option to buy something at a certain price. Such a right may be memorialized in a written document, but it is the intangible right that can be treated as though it were a form of property.

I do not see how a property right can arise in any other way, other than when it is ultimately grounded on either: (a) a rivalry over use (which can only be in tangible things), or (b) a contract (which can only be applied to those who’ve consented to be so bound).

IP does not depend on either tangibility (only this metaphysical notion of “mixture of tangible and intangible), nor does it arise from any contract, which obviously would require an explicit agreement with a particular person, unlike property rights, which apply to everyone regardless of their consent.

>>>Property rights are a human device. They exist for the purpose of enabling cooperation.

Your suggestion that property rights are a “human device” strikes me as an unprincipled rationalization for claiming that rights can be defined in any way that you (or we, or some unspecified person) wants them to be. It is an assertion that is ultimately based on utilitarianism.

One of the reasons I cannot agree with you is that you keep switching between this utilitarian rationale, and a principle-based, moral, natural-rights rationale (e.g., when you say that being unable to own the entirety of one’s intellectual output makes you a slave). You appeal to principle and morality to make some of your basic points, but then you fall back on utilitarianism to close your circle, and defend the contradictions and holes in your argument.

I think this problem is also relevant to your argument that I am making inconsistent assertions that (a) a decree of monopoly privileges deprives everyone who doesn’t get the privilege of some measure of their property rights, and (b) that a hotel owner is a 100% holder of all rights in the building, including the monopolistic right to sell the rooms.

You claimed that I would require more integrity and intelligence than most people are capable of exhibiting if I were to understand this contradiction. I have been mulling it over all weekend, but for the life of me, I do not even understand why you think these points are in contradiction with one another.

Yes, I believe the hotel owner is presumed to have good title to his building, and that is the source of his rights as a monopolist in that building, which, as I say, is implied as one component of his right of total ownership.

I contrast this situation to a company getting a piece of paper from a king that says that Company X has the exclusive right to buy and sell all of the wheat in some territory, which has the effect of giving Company X a larger measure of property than it had the moment before the decree was issued. Likewise, everyone affected by the decree of monopoly to Company X loses a measure of the property that they had the moment before the decree was issued — namely the right to sell wheat out of that location. Any wheat that anyone may have owned, or planned on owning, is no longer salable there, except through the monopolist. I believe this transfer of property right, although done in the name of the law, is basically a form of theft, benefiting Company X at the direct expense of everyone else.

I do not believe that being concerned over the source of title defeats my anti-IP position. Even in a legal regime where people believe in such a thing as IP, it is possible to also be concerned with basing one’s non-IP rights on a claim of good title. The two don’t strike me as incompatible. (It is not necessary, in practice, to trace one’s title all the way back to pre-history (or time immemorial, as they say), in order to show good title. Like other property rights, title is relative — it is only necessary to show that your title is better than someone else’s.)

I do, however, still stand by my position that one of the ways that someone can acquire title is through homesteading, which is the conversion of unowned objects into property through use. That still happens today. This homesteading principle doesn’t apply only to land, incidentally, since movable objects can be abandoned, and thus become unowned, and then owned again by the first new user.

Well, I’m not sure what you mean here. Whereas causality may stretch to infinity in either direction, past or future, for the present, legal theory uses the concept of “proximate cause” to deal with relevance, or in your terms, to figure out what is “helpful”.

It is helpful in sorting out the issues of property rights. The issue is the relationship between creation and production. That is a causal relationship. I’m familiar with Kinsella’s arguments against creation as a justification for IP, but I’m not arguing here that I create hydrogen atoms.

When determining liability for an event, for example the events leading up to the actual injury are traced back in time following the chain of causation. Since “injury” is an effect, there must be a cause; an act or an omission to act. If the cause is “proximate” to the effect, it is relevant, if not, the chain of causality is said to be broken, and liability cannot be assigned on the basis of causation. (that’s a very rough summary of the concept).

The issue with IP is whether there is a causal relationship between an act and an effect, and if so, how does this causal relationship affect the concept of “better title” to a tangible good from production that has both tangible and intangible components.

Let’s use a concept of “goods” to explore this. A person buys, by “legal” means, the means of production to produce a good, including all the inputs. If he owns the means and the inputs, then he would also own the good produced. This means of production has tangible and intangible attributes. (I don’t need to deal with scarcity at the moment.) How do I know this? A pile of inputs do not spontaneously assemble themselves into a good. Neither does the random application of labor, heat or water. We have to break down the production process into its tangible and intangible attributes.

According to Mises, “Production is not an act of creation; it does not bring about something that did not exist before.” (HA VII.4 p 140) This must mean that a good must “exist” in some form before it can be produced.

Also, “Only the human mind that directs action and production is creative. … We call it creative because we are at a loss to trace the changes brought about by human action farther back than to the point at which we are faced with the intervention of reason directing human activities. Production is not something physical, natural, and external; it is a spiritual and intellectual phenomenon. Its essential requisites are not human labor and external natural forces and things, but the decision of the mind to use these factors as means for the attainment of ends. What produces the product is not toil and trouble in themselves, but the fact that the toilers are guided by reason. The human mind alone has the power to remove uneasiness.” (ibid p. 141)

So, before a good can be produced, it must exist in the human mind. If I could simply sell you what is in my mind, I wouldn’t need to produce it. So, even though it exists in my mind, it is not a good until I produce it. Production produces goods (output) and goods can be sold (input). Goods are the subject of economics, praxeology and catallactics.

In any production process that produces goods, carries along the chain of causation, property rights of ownership in the means and the output; they are both the property of the producer. Output equals income. This income is attributable to the producer and no one else.

Upon both the means of production and the goods thereby produced, the owner has a monopoly of possession and use. By such monopoly, which are “compatible with the conditions of a market economy” (HA XV, 5 p. 277), he has “exclusive control of the supply of a definite commodity” (Ibid.) This monopoly is a manifestation of his property rights. However, a monopoly in “possession and use” does not imply monopoly prices, which are antithetical to a free market, so and in this sense “…monopoly is everywhere on the market.” (Ibid p. 277)

If ALL production yields goods, and if the means of production are privately owned, then the output of that production are also privately owned in the form of monopoly property rights, even using the homesteading/transfer theories of property ownership attributable to Rothbard; no one can have better title to them.

However, this monopoly only applies to that property attributable to that particular producer. A monopoly in “my goods” does not extend to a monopoly of “all goods”. For example, “Under copyright law, every rhymester enjoys a monopoly in the sale of his poetry. But this does not influence the market. It may happen that no price whatever can be realized for his stuff and that his books can only be sold at their waste paper value.” (Ibid 278)

How do we determine ownership of the outputs (goods) produced by the subject means of production? This can be done by tracking the production process backwards along the lines of causality. Goods exist after production. Prouduction comes aftrer acquiring the means. The means come after assembly of the compoents, including machinery adn inputs. Assembly of components on comes after creation. Creation comes after the “intervention of reason directing human activities”. At what point along this arrow of proximate causation, do these goods become “my goods”?

One could say that if the means of production can be owned, then the output of that production can also be owned. If production has both tangible and intangible components, is it rational to say that ownership is destroyed by virtue of the presence of intangible components?

Since all production is essentially directed by “creative” human action, then all production has intangible components integrated within them. Since we know that production output can be owned, then we know that the intangible components of this output must also be ownable. This is a very complex path to follow, only to arrive at the obvious. Certainly the baker owns his loaves, if he owns his ovens, flour and recipe.

Let’s use a book and copyright as another example to explore this further. What is different about a book? A book with random marks and letters is incomprehensible and of little value. A book that contains detailed instructions on how to compile software would have value to someone who wanted to do that. What is the difference between one and the other? Obviously there is a difference, right?

The production of a useful book, one which has marginal utility, is the product of someone’s production. All production is composed of both tangible (paper, ink, letters and words) and intangible components, i.e. the “intervention of reason directing human activities.” Why should ownership of this good be subject to different rules of property and ownership than a table or loaves of bread?

Since a good is not just the ideas that led to its production, why would a book be granted only the attributes of ideas, implying they are free goods, like letters of the alphabet?

Why would this blog be assigned only the attributes of tangible letters and words? They also have meaning, and that meaning was directed into being by me, the author. It was me who stuck the keys and hit “send”. These are my actions. They are attributable to no one other than to me. It would be an infringement of social norms of decency (immoral) to claim they are yours, just as it would be immoral to take my goods and sell them as your own. Both are an infringement of rights, a moral breach, and an unjustifiable intervention in of the principles of a free market.

How does this intervene in the free function of the market?

Output equals income. If the output of a producer does not result in income attributable to him, he is producing for an external market, and he is a slave. If human action is motivated by a desire and calculation of betterment of his current situation through available means, why would he voluntarily be a producer for an external market? Of course, he would not. An activity which results in an inability to capture the income from his output, will quickly be discontinued. Human actions which benefit only others is a definition of slavery.

Property rights are a human device. They exist for the purpose of enabling cooperation. Cooperation is fundamental to the division of labor. A division of labor requires an ability to freely exchange with others, and free and orderly exchange depends upon pre-defined property rights. If you want shoes, you must adhere to an ethics which recognizes the right of the producer of shoes to own them right up until the point at which he receive payment. No rational producer of shoes will continue to produce them if his output does not equal his income. Why produce shoes for an external market?

“Copyright opponents (at least those on this site) take the position that the author’s capital investment is not an independent source of property rights…”

I agree, capital investment alone does not create property rights, yet no investor would commit capital to a project serving only an external economy. Capitalists demand a return. Output equals income. No rational engineer will take the time and effort to produce a technical manual if, once produced, could be freely copied by anyone who acquires it. Such ethics would establish a system that supports welfare, slavery and impoverishment. This is an ironic position for those who are otherwise advocates of free markets.

“The only problem from economic point of view would arise if some effects involved goods that have not been homesteaded. But that is not the case with IP. Just like the concept of ownership of value is mutually exclusive with the concept of ownership of physical property, the concept of owning patters is also mutually exclusive with the concept of ownership of physical property. If you want to have both, you contradict yourself.”

As I have said before, arguing property rights from the standpoint of “homesteading” is an empty exercise in futility. Even so, based on what I’ve said above, one could make a pretty strong case based on “better title” that no one has a better claim to title to his property than the author or the producer of goods from his own private means of production.

It is the transfer of privately owned goods that make the economic world go around. How they come to be “owned” is much less important than establishing a device for starting out and then allowing the market to assign ongoing ownership based on sovereign consumer preferences.

If, as Kinsella and Hoppe say, the purpose of property rights is to avoid potential conflicts over ownership, then how that originally happens is much less important than making sure there are acceptable conventions among cooperating humans, i.,e. society.

Crusoe alone on a desert island does not a society make. Likewise, homesteading, in any realistic or practical sense, is immaterial. It is a construct, and nothing more. Better to stick with the private ownership of property, and let the markets work.

And notice, for 99.999% of real property transfers taking place at this moment, there is no conflict or dispute (excepting the foreclosures mess by big banks at the moment!). Of those where there are, they are handled non-violently and by rule of common law, IP disputes notwithstanding, especially copyrights, trade secrets, and to some extent, even patents. Of the three, patents are clearly most dysfunctional, but what else is new? Thought about banking lately?

Peter, your post was very existential. Allow me to continue with this approach.

Actually, that was not my intent. My point was to show the difference between real world and interpretation thereof.

Causality should be relevant.

Ok, but causality extends to infinity. Everything that happens is caused by everything that happened before (well, I don’t recall if the question of the speed of gravity waves has been solved, so there might be a small proportion of actions which do not influence each other due to their distance being too big with relation to the time of the occurrence). The only difference is that people consider some of these causal relationships for more relevant for predicting what will happen in the future. While driving, for example, I see other cars. That sight influences my brain and becomes a part of all the future actions I do. However, apart from mentioning it as an example, it is not helpful in predicting how future develops.

If you assume that causality should be relevant even if it does not involve damage to property, that still leaves an infinite number of infinite layers of causality. How is that a helpful approach?

By the way, I congratulate you in recognising that the concept of causality is often used by IP proponents to argue for IP, although they cannot formulate it like that themselves.

Therefore, it is the fixation of the ideas in that book which creates the utility, value, and price.

Wow, you seem to be doing very well today. That’s right, altering of physical matter is how the value of goods is increased. But that does not mean that this act is an independent source of property rights, especially if such an act is covered by physical property rights anyway.

Copyright opponents take the position that an author’s capital investment has no real value…

No. Copyright opponents (at least those on this site) take the position that the author’s capital investment is not an independent source of property rights, because all the resources involved are already covered by physical property rights. Changing value of something does not create a claim, unless previously covered by a contract.

such a position concludes that authorship is production for an external economy, and this is somehow consistent with a cohesive theory of free markets. It is not.

All actions whatsoever have some effects that change the value or utility of property of other people, i.e. all actions whatsoever cause externalities. Authorship is just a specific interpretation of a very small subset of this phenomenon. The only problem from economic point of view would arise if some effects involved goods that have not been homesteaded. But that is not the case with IP. Just like the concept of ownership of value is mutually exclusive with the concept of ownership of physical property, the concept of owning patters is also mutually exclusive with the concept of ownership of physical property. If you want to have both, you contradict yourself.

This is excellent. Thank you. With just a little more of your indulgence, I think we can close in on the key issue.

I agree with everything you say right up to here, and you have demonstrated that you and I are on exactly the same page with regards to the meaning of monopoly. Then you say this:

“A monopoly privilege, however, granted by a monarch, is not a legitimate source of property rights. I think we can all agree on that.”

Let’s explore that statement. We are talking here about the legitimacy of the source of monopoly privilege. We have agreed that these privileges take the form of property rights, and are limited by the boundaries of the property. So the hotel owner “owns” the hotel, and his monopoly rights are limited to that particular hotel. That is the nature of property ownership. Agree?

You are saying that Mises’s treatment in the cited passage assumes that the acquisition of this property depends on the legitimacy of his title of ownership. Agree?

We just had a post from Mises dealing with this very issue, here. http://mises.org/daily/4718 I commented here: http://blog.mises.org/14940/private-property/#comment-743623

Here is the important issue this raises. NO property in the normal sense of the word, (real property or chattle) was actually acquired by homesteading by a first occupier. Even if it ever was, it was likely expropriated by someone later on. This is a major flaw in the homesteading principle. Imperishable property (land and other natural resources) has a chain of custody that reaches far back into history. As Mises points out, and as I have said elsewhere on this site, the homesteading aspect of the Rothbardian definition of ownership and ethics is completely useless.

What is important from an economic perspective, is the exchange of title from an uncontested owner to a prospective owner by operation of a free market. It is not really that important how the seller’s owner/ancestors “originally” acquired the property. At some point in time, often by royal decree, title was established. Since that time, to the extent that a free market (or something close to it) existed, title to real property was transferred by sale, gift, adverse possession, or abandonment.

From an economic perspective, what was that “royal decree”? It was merely the human device operating at some time in antiquity that established uncontested title in land. It is equivalent to a legal convention concerning property ownership. More importantly, from that moment on, property rights were a settled issue, and market operations proceeded in an orderly fashion. (I realize I am taking some historic simplifications, but for the sake of allowing me to make the point, grant me poetic license).

Therefore, I am asserting that the source of acquisition is not as important as the conventions we establish to enable an orderly and free market. In order for the markets to be free, we must not create rules of intervention concerning the operation of that market. Those rules are in essence, I personally believe, something very close to Austrian Economic Theories.

I think this is precisely where we see things differently. Now stay with me.

Rothbard says that ownership in property can only be acquired legitimately if it was 1)homesteaded or 2) acquired legally from someone who did. He employs this “human device” of property because he is an anarchist. To be an anarchist, you cannot construct your ethics from something like “legal convention”, because a legal convention implies laws, and laws imply enforcement, and enforcement implies government.

He crosses himself up on this point because when discussing Ancap theories of private enforcement agencies, he concedes that they must all agree on a common code of law. I would suggest that a group agencies, private or otherwise, that all agree on a common code of laws, and which evolve such that 100% of the citizenship is covered, starts looking a good deal like government. This is a major, significant inconsistency. I have discovered others, like Touchstone’s argument concerning why children and the disabled cannot receive protection under anarchy.

Unless you grant the legitimacy of property rights that are established by legal convention, then you cannot really show that ANY OWNER has legitimate title of ownership. To Mises’s point, in a free market, no matter how you start off, consumers allocate ownership rights by way of their consumer preferences.

So the issues are two: 1) what are the legal conventions we will accept as a basis for property ownership, and 2) how do we prevent interventions which interfere with the operations of a free market.

If you are an anarchist, you are compelled to avoid conflicts with that ideology. This is done by defining terms, such as rules of ownership, which avoid conflict with the social need for legal convention and third-party (government) enforcement of laws.

In my limited experience, I have come to believe that this requires a process of assuming conclusions and constructing rules of ethics which define away these conflicts. The result is an internally consistent logical construct that clashes with reality (i.e. history, social convention, legal conventions) at the margins.

The real objection to IP laws, when you strip away all of the misunderstandings, misstatements, and rhetoric, is that it implies government, which is equivocated with State. Therefore, one who disavows the State, and therefore government, must oppose IP.

Your arguments reflect this bias:

“The problem with this kind of monopoly is not its scope, but rather its source — the monopolist got it as the result of the exercise of raw power, not homesteading or trade.”

By this logic, none of us could legitimately own our property. None of us can show that we acquired it by homesteading, or trading with someone who did (or can show they did).

If we do legitimately own our property, it is because we have accepted the legal convention that ownership, once bestowed, will be respected. If it cannot, or was not bestowed by a proven act of homesteading, why can we be said to own anything? How can we call it legitimate ownership? By the same token, legitimate ownership today follows free market principles; you cannot own something unless you trade with someone who “actually” owns it.

This leads you to reach a conclusion that is in direct conflict with your earlier assertions in this very post:

“And, like all monopoly privileges, the instant they arise, they deprive everyone else of some measure of their rights of property that they had the moment before.”

And from above:

“Now, this owner has 100% of the property rights in the building. This includes BY DEFINITION the right to be the sole seller (or monopolist) of the rooms in that hotel, on whatever terms he chooses to make with willing buyers.”

How can these both be true? Because you are assuming that the hotel owner’s title is legitimate and the other monopolist’s is not? How so? If you cannot resolve this conflict for real property, how can you expect to resolve it for intangible property? One is the simpler case, one the more complex. If you cannot resolve it for the simpler case, how can you do so for the more complex?

With all due respect, and believe me it is considerable (you are intelligent, articulate and very well educated), I will be amazed if you recognize and admit the circularity of logic that is required to do this. You, like many here, have invested much time and energy in formulating an d memorizing this position. What a shame it would be to find it wasted time.

If you could, we could move on to an equally interesting topic, and one of more practical import; What, exactly, should be changed about IP law?

Respectfully yours,

The word “monopoly” refers to a “single seller,” or something similar. “Polein” (πωλειν) specifically references the act of selling. This is distinct from the act of using, which is broader, and may or may not involve an attempt to sell the res, or thing owned. That’s why I made a distinction between rights in property that depend on selling something, as opposed to a right of ownership that may be just to use it (with or without selling).

I think there are two (2) parameters of monopoly we should consider — (a) its scope, and (b) its source. We have been bumping up against both of these parameters — scope and source — in talking about monopolies, and the rights of ownership. I’ll try to be more clear.

As for scope, Mises was addressing this issue in the passages you quoted (about the hotel owner having a monopoly on his hotel’s rooms, but not on all hotel rooms in town). The short answer is that a monopoly is only as big as the scope of the goods it purports to encompass. You have a monopoly on your body, but you do not have a monopoly on the labor of other people’s body. You may have a monopoly in a particular ton of wheat without having a monopoly on all wheat produced by anyone in X County in the Year Y.

The other parameter of a monopoly is its source. What Mises was also referring to (as to the hotel owner) is that he presumed that this hotel owner had a just and proper source of his right of ownership in that particular hotel. He is the sole owner, and owner of all property rights in it. (Property rights are divisible in many ways, especially with real property, but let’s stick with a man who owns the building 100%, or in fee simple, as they say).

Now, this owner has 100% of the property rights in the building. This includes BY DEFINITION the right to be the sole seller (or monopolist) of the rooms in that hotel, on whatever terms he chooses to make with willing buyers. Or, he could live there himself. Or he could keep it empty and wander through the halls from time to time. Or use it as a modern art piece. Whatever. It makes little sense, in my view, to call him a “monopolist” of the hotel, even though he is, because his right of total ownership NECESSARILY includes the right to be the sole seller of it, or any part of it.

The way I have been using the term “monopoly” is not to refer to someone who has a broad scope of control (i.e., controlling this particular hotel, as opposed to controlling the renting of all hotel rooms in town). When I say “monopoly right” I am referring to the historical form of monopoly privileges, which were in the form of a governmental decree (typically monarchical, but not always), that someone (or some company) had the supposed right to control all of the selling of some class of good, to or from some particular place.

This type of monopoly charter or privilege comes from a completely different SOURCE than our hotel owner. We (and Mises) presumed the hotel owner acquired his ownership of the hotel in some proper way. A monopoly privilege, however, granted by a monarch, is not a legitimate source of property rights. I think we can all agree on that.

What is so wrong about these monarchical monopoly privileges? They deprive everyone else of the full measure of their property rights! If one company gets a monopoly privilege handed to him by Queen So-and-So, that means that everyone else in the affected area suddenly finds that, with regard to the relevant objects they might own (wheat, tea, silver, spices, whatever), or once owned, or might think about owning, they no longer fully own it. It means that they may own it for some uses, but they DO NOT own it (according to the Queen) to the extent that they may try to sell it. That’s not full ownership any more.

In other words, the monopoly privilege granted to one person functions as a violation of the property rights of all others. (The Queen thinks she has the power to define property rights, but I think we all agree that she doesn’t.) Whatever rights the monopolist gets, that’s what everyone else has lost.

The problem with this kind of monopoly is not its scope, but rather its source — the monopolist got it as the result of the exercise of raw power, not homesteading or trade.

What Mises was describing is that some people object to anyone having a monopoly whenever its SCOPE starts to get too big for their comfort level. In some market area, somebody might get a de facto monopoly on some type of good, through completely legitimate means. For example, let’s say that some guy (Owner A) owns a Widget factory, and there’s a second Widget factory on the other side of the county, owned by someone else (Owner B). Then Owner A buys or inherits Factory B. Even though he acquired both Factory A and B rightfully, he now has a local monopoly on Widgets. This, Mises was saying, is not a real economic problem. To Mises, the main issue was that the source of property rights be legitimate, and that the monopolists legitimate property rights be respected, along with everyone else’s. It is not economically sound to say that Owner A does not (or cannot) own both factories simply because there are only 2 locally. What matters is the source of those property rights, not their scope. People will adjust. The monopoly will not last. If we look to a slightly larger scope, competition will still be found to exist. A property-respecting solution will be found, even if (in the short run) the Owner A tries to hike his prices up.

My argument is that (in terms of both source and scope) a copyright or patent functions more like the monopoly privileges that monarchs used to hand out to insiders. They do not operate at all like ordinary (non-copyright, non-patent) property principles, in which people acquire rights through homesteading of unowned goods, or by trade, gift, etc.

The main reason that copyrights and patent rights are a form of monopoly privilege is that they focus on someone being the right to be the sole seller. A copyright or patent right cannot be grounded on defining someone as the sole USER, because patterns are infinitely replicable without altering any other copy in any way. One person’s copying of a book does not affect any other book anywhere in the world. There is no possibility of rivalry of uses of a pattern. Therefore, a copyright or patent is ONLY concerned with who gets the exclusive right to sell objects that are based on that pattern (or approximately similar to that pattern).

If we stop looking at ideas as this metaphysical thing that can be owned, and can be considered “stolen” when it is merely repeated, and instead focus on what property really means — protection against rivalrous, interfering uses — then copyrights and patents are easily recognizable as merely a re-packaging of the age-old monopoly privilege, not a legitimate form of property right.

And, like all monopoly privileges, the instant they arise, they deprive everyone else of some measure of their rights of property that they had the moment before.

Yes, if there were only more hours in the day. The addictive nature of these discussions is killing me in my day job…

“I am saying that the mere fact the expression of good ideas has value does not mean that all expressions of that idea, wherever they may be found, are owned by the one who first uttered them.”

So, we agree, and so does IP law. Just expressing an idea is not sufficient for establishing property rights. For example, giving a speech is not sufficient to create rights, it must be recorded or written down. TV broadcasts are not protected unless they are recorded simultaneously with broadcast.

Also, the uses you describe would not fall in either a logical framework or the framework of IP law. That tends to focus on commercial uses. So you have to give a commercial use to follow the argument here. It is not reasonable to create an example of non-commercial use to make your case.

However, it is in fact that attribute of ideas that you are describing which creates the difficulty in defining rights in IP. Ideas and letters of the alphabet share similar attributes in this regard. Neither, at this level of fundamental usage, are subjects of IP law. However, when it becomes a “fixed embodiment”, it take on attributes of chattel (property), and can be dealt with according to well established principles of law.

This difficulty in drawing the bight line is why it has grown into a system far beyond any measure of utility or fairness, in many cases, especially in patents, but also in digital copying. The low cost of copying is challenging our ethics and morality regarding the boundaries of property theory. There is no doubt reform is called for. But we can’t go there because we disagree on whether there is EVER any justification. I am finding that a good deal of disagreement is actually based on imprecise use of terms and misunderstandings about what the law actually says and tries to do.

I am serious about trying to work my way to a solid conclusion about this, and I intend to remain consistent to classical liberalism as I understand it. I am searching for contradictions in my position relative to libertarian and Austrian scholarship. That is why I value these very in-depth discussions with the likes of you and Peter. Thank you.

I don’t have the time at the moment to go through your last post point-by-point, as we have been doing, but I picked up on these points for now, and will try to get back to the discussion later.

>>>So, one way to prove that ideas exist is to look to the fixation of them in a tangible item.

You are making this far more complicated and abstract than it really is.

Ideas only exist inside the brains of men. They exist as a highly intricate, complex set of neurons, and their respective electro-chemical components and impulses. The combinatorial complexity of this organ is massive, to say the least. The ideas experienced by a brain are only “real” in the sense that they consist of the components of this organ.

Once communicated, these ideas become replicated as impulses inside the brain of the recipient. My position (and I believe Peter’s as well) is that these impulses and neurological components are wholly owned by the person in whose brain they reside. He can do with them what he wants, unless he previously agreed (via a contract) not to do something with them, or in the act of expressing them, he interferes with someone else’s use of his property (e.g., writes them on the side of someone else’s building).

It’s impossible to interfere with someone’s use of his ideas, unless you interfere with his brain somehow.

The process of creating changes in external, physical objects based on these ideas (e.g, speaking, or writing a book, or painting a picture) is a form of use of those objects. If you are writing on paper owned by someone else, you are interfering with that owner’s use of that paper.

However, merely copying someone else’s paper is not a form of interfering with the author’s property, because you are not interfering with his idea (which exists only in his head), or his book (because the author does not typically own all copies of his book, particularly after he sells them).

I am not saying that good ideas do not have value, nor that people would not pay to hear or read them, nor that there is not a capital investment necessary to create and communicate the expressions of them. That’s all obviously true.

I am saying that the mere fact the expression of good ideas has value does not mean that all expressions of that idea, wherever they may be found, are owned by the one who first uttered them. The ideas themselves are mere electro-chemical impulses, and become the property of the person who hears the song or reads the book. The expression of those ideas, in physical formcannot be owned by the creator of the idea, because that would, in effect, create a property right belonging to the author, in either the brains of everyone who hears his song or reads his book, or a property right in their paper, canvases, etc. Those things are previously owned by others.

Peter, your post was very existential. Allow me to continue with this approach.

Humans are rational and conceptual. We use pattern recognition, symbols, language and visualizations to create and process data. We seem to agree about all that.
What are ideas? Are they like pornography; i.e. it’s hard to explain but you know it when you see it?

As humans, you know and I know they exist. They exist in our minds, ultimately. We also know that humans act, and one of these actions is communication. We also build things. I don’t think you are disputing the fact that before a human can act (except in very non-abstract ways that involve the autonomic nervous system), we must think. Ideas are the “things” we use to think. Ideas can be strung together to form complex thoughts, stories, formulations, descriptions, and all the other attributes of language that make communication about complex subjects, like this blog, possible.

So, we know ideas exist, but how can we actually prove they exist? You and I can’t point to one as we do with a tangible item of reality, yet we agree they must exist in order for me to strike these keys and communicate something comprehensible by you.

So we could say, we know ideas exist when they become fixed in some tangible medium. Communication is a tangible event, and causes changes in the natural world of tangible objects, cause and effect. This communication process is a result of cause and effect, and hopefully, me causing my ideas to be encoded into of patterns of sound, light, or motion, allow you to experience the effect; i.e comprehension.

Causality should be relevant. Communication, like all actions, follows a direction of causality. Just as effect must always follow cause, comprehension always follows expression. I must cause the patterns to exist before you can comprehend them and share my idea. These particular patterns must be created first, then fixed in some medium, and then you may receive them through your own human faculties, and finally comprehend them. I doubt you have any problem so far.

So, one way to prove that ideas exist is to look to the fixation of them in a tangible item. The person who causes these ideas to be fixed is the author of them. This is the method that IP law uses to deal with the intangible nature of ideas. The laws do not recognize any property attribute in ideas until they are fixed in some tangible medium, because before that time, there is no way to deal with them as property. However, once they are fixed, they can be dealt with in exactly the same way as any other tangible item; as chattel, subject to the laws of tort, contract, and property.

You raised the issue utility. Utility is an economic question, because it includes the concept of goods. A good has value in the market if it offers some form of utility to the person who does not own it. The desire to own it creates demand. This is the basis of economic trade, and requires that the issues of property and ownership of that property is known in advance by both parties. Mises discusses this issue as a relationship between a “free goods” and “economic goods” (HA, Schol. Ed. p. 93). A free good has no value because it is abundant and needs no economization, and therefore there is no price mechanism available for economic calculation.

An economic good is the subject of economics, because it has utility, and is is limited in availability. It has become common to refer to scarcity to explain this difference. Some argue that ideas are not scarce, just as letters of the alphabet are not scarce. My use of letters to communicate with you in no way limits your access to all the letters you may desire. In this sense, they are a free good.

All tangible things are scarce. However, limited access is not sufficient to create demand for a thing. There must be utility as perceived by a person who does not already own it. If this condition exists, then it can be described as an economic good. A good which directly satisfies this desire for utility is called a consumer, or first-order good. If its utility is as an input for further production, it is a producer good, or higher-order good.

A book is a consumer good. It is authored by someone. The author fixes his ideas on paper by use of letters and words. These words, taken as a whole, convey complex ideas. These form a pattern which is comprehensible by other humans. If it is a random pattern, it would have no utility, and therefore no demand, even though it is scarce. If it has utility, then it must be something non-random about the pattern that other humans find of value when comprehended. An expectation of receiving this value is apparently sufficient to create demand for it, as most people who buy books pay for them before they actually read them.

Imagine I am an author of a book, and it is the only one that exists with my pattern in it. If I burn the book before anyone else has a chance to read it, what happens to the ideas? They still exist in my head, but they cannot exist in yours (at least not the ones caused by reading my book). But they are no longer fixed, and have no importance in an economic sense, and also in relation to IP laws. It is only when they are fixed that they can be objectively (and legally) said to exist. Existentially, they still exist as long as I do.

Finally, humans act because they are rational, in a economic or praxeological sense. This requires that humans use their abilities to perceive and conceptualize in order to establish goals. Humans act to achieve those goals. Those goods which serve these goals have value, and this value is reflected by prices. That is the nature of an economic good. (dare I say “attribute” of an economic good?)

If you subtract the ideas from a book, the book no longer has value beyond the meaningless patterns on a page. These patterns can be perceived, but they have no utility. Therefore, it is the fixation of the ideas in that book which creates the utility, value, and price.

Causality is a feature of the natural world, and of economics. Cause comes before effect. Production comes before consumption. An exchange of utility is an exchange of goods; something for something, goods for goods, value for value. A producer creates output. Output equals income. If the price for a given output does not result in income for the producer, then the producer is producing for an external market. Producing for an external market is slavery. If one has a choice in the matter, since slavery has no utility, it will not be of value. One does not normally choose slavery for themselves. It is a rip-off.

If a producer chooses not to produce, consumers must do without consumption. Therefore, consumers prefer production. This preference is reflected in the willingness to exchange value for value. This is the nature of the economic calculation and free markets. Free markets are disrupted by the intervention of external market forces because they disrupt the relationship between producers and consumers.

This relationship is not determined on the basis of the cost of replication of a given good. Common sense and IP law both recognize this. We could think about this in terms of a marginal cost of production.

In any production process, there is a cost that is sunk into the production of the first finished good. This is a capital investment. The marginal cost of producing the second finished good is much lower. Prices paid by the consumer in a free market, reflect both the capital cost and the marginal cost of production. If the consumer could acquire the good for the price of the marginal cost, there would be no reason to invest capital in a production process where only marginal costs could be recovered. However, if the entire capital cost had to be paid by the first consumer, it is not likely to be perceived as a fair value for value, and trade is unlikely. Therefore, prices reflect some distribution of capital costs among a larger number of consumers. The capital component is not zero, and it is not identical. It is somewhere in between, based on the size of the market, the number of consumers potentially having demand, etc.

Copyright opponents take the position that an author’s capital investment has no real value, and the consumer should only be required to pay the marginal cost of production, which may be roughly estimated as the cost of the process used for duplication. For example, somewhere between $.01-.05 a page if you use a photocopier. Digital reproduction is much less. Even this price is not income for the author. This price is paid to acquire the technological capability of reproduction. It does not result in income for the author’s output.

Therefore, such a position concludes that authorship is production for an external economy, and this is somehow consistent with a cohesive theory of free markets. It is not.

You may argue that this relationship between producer/consumer can somehow be restored through non-governmental means. Perhaps, but unless it is based on a theory of property that supports production/consumption for internal markets, it is anti-free market theory.

The irony of all this is that some of the most important spokespersons’ of the Mises Institute are, in the final analysis, against free markets. Many others simply repeat their conclusions.

Now, you have to admit, that’s funny right there. I don’t care who you are… (In conformance with the provisions of copyright laws, that joke is attributed to Larry the Cable Guy.)

VERY SPECIFIC FACT PATTERN

Patterns are something people make up in order to make sense of the world. It is not something that exists in the same sense that for example a rock exists. Any object features an infinite number of patterns. Depending on our goals, we use some of them and ignore others. If we assume that the pattern has some relevance to property rights, we logically need to ask ourselves which of those infinite number are the relevant ones and on what level (e.g. is “book” a relevant level, or “language”, “characters”). We also need to ask if causality should be relevant (i.e. does independent discovery create a new identity or not).

Obviously, since the questions are based on utilitarianism anyway, they are not economic questions. The other issue is that not even the proponents thereof attempt to answer those question, instead creating a horribly convoluted nonsense.

I recall you were wondering previously why I say that attributes cannot be property. You said something like ink+paper+idea = book. That’s a metaphorical representation. The “idea” is just a interpretation that exists in peoples heads, it’s not a separate component, it’s an attribute of the ink and paper. If you take away the ink or paper, there is no idea anymore. Also, if you ask yourself how to remove the idea without removing the ink or paper, you’ll realise that that’s a nonsense. Just like “value” does not add a new, separate component into objects, ideas and patterns don’t do it either. All they are is our perception. That does not mean they useless. To us, it’s very useful. But that does not mean they has a separate existence.

(slowly processing through backlog)

“…we already have a term for the kind of control that the owner of the hotel has over the letting of rooms — it’s his property.”

I don’t know that purpose is the test for property or monopoly. Not sure what difference this is supposed to make. I think you are blending meanings across property, purpose and monopoly rights. It is confusing.

Property is owned. Owned means exclusive control and use. If you own the means of production, you have an exclusive interest it the output. If you own something, then you also own the exclusive right to dispose of it, through sale, gift, destruction or abandonment. If you want to sell it, you have the exclusive right to do so. No one else can make it available to the market because you represent a monopoly on the source of that particular product or good. This is a monopoly, by its simple meaning. Having a monopoly does not necessarily imply monopoly pricing. Why? There is an explanation. Mises gives it. Simple.

“He’s the owner. He has full control of the building, which includes the right to sell (or rent) it, but that right is not dependent on the actual transaction of renting for his rights to exist. He is injured by any interference with his use, and has the right to prevent any such interference, regardless of whether it interferes with an existing or potential sale.”

Isn’t what I’ve said above just a restatement of this by you? You seem to be focused on sale, but that is only one aspect of ownership rights. You can keep it. You can burn it. Why? Because you own it and it is yours. Simple.

“I have been using the term “monopoly” to describe the kind of chartered, government-sponsored decrees that have been granted throughout history — the right to be the sole importer of wheat for X country, or of cotton out of some port.”

This is precisely the distinction Mises is describing. If I have a monopoly on some essential commodity, then I can demand monopoly prices. Why? Because your choice to trade or not is driven by the necessity to have it. You cannot do without it. This is the type of monopoly you are attempting to describe. This generally does not apply to the subject matter of IP, except in some rare cases where the result is arguably unsatisfactory.

“By this term, I am referring to the supposed right to own all of the trade, by anyone, in whole classes of goods — which renders people unable to sell stuff they may otherwise own!”

You seem to be making a different distinction here; between controlling the source of a good (How could you have stuff to sell if I own the only source of that stuff?) and the distribution of a good (How could you buy stuff from any other source than me, if I’m the only one to have the stuff?)

Perhaps these are two ways to enforce a monopoly, but they seem like just different aspects of the same thing, to me. I cannot distribute something I don’t have. I cannot buy something from someone else if there is only source of it. What’s the diff?

“In the case of copyright, the claim is that it is that everyone on planet earth (or at least in the places that are reachable) cannot produce anything that even resembles the pattern of some other object.”

That is a very gross generalization that has no basis in reality. IP case law is filled with specific examples of how the distinction is made, given a VERY SPECIFIC FACT PATTERN. If there were only a couple of sets of facts, decisions could be made once and for all, and no further litigation would ever be required. The reality is that new fact patterns constantly emerge which requires a refinement of the distinctions between what can be protected and what cannot.

Pure ideas receive no protection. Ideas that are not “fixed” in a tangible medium are not protected. Nothing is protected forever; protection is always limited. The nature of the intangible content of a good must meet certain criteria for “originality” and “uniqueness”.

In addition, if you try to hoard your innovations you also are not protected, because one of the features of IP law is to encourage dissemination as quickly as possible, so that society can benefit sooner rather than later. We (society) make a deal with innovators (society) to get the benefits sooner by trading for some market protections. Generally, it’s a good deal. Specifically, there are big problems.

“You seem to think that property rights exist between an owner and an object.”

No I don’t. That is absurd. Rights exist in relation to other’s rights relative to the subject property. Anything that can be owned must be owned by someone, eventually. In the absence of scarcity or other people, property rights are meaningless.

“The right concerns the relationship between man and other men, with regard to using some thing.”

See? We seem to agree.

“The owner’s use can be anything that does not interfere with anyone else’s use of anything that THEY own.”

Obviously.

“You do not, therefore, have the right to control the behavior of other people, other than to prevent them from causing interference with your use of your stuff, because to control them in any other way necessarily means that you are interfering with their use of their bodies, which they own.”

Are you arguing for my side now?

“Now, you can call this right of ownership of your stuff a “monopoly,” and in a sense it sort of is, but that’s a conflation that blurs the distinction between true property and copyright/patents (which are false or metaphorical property). “

What the heck is “true property” as opposed to “false property”? It is or it isn’t. If it is, there are rights associated with owning it. If it isn’t, no one can own it.

Exactly like real property, I own it if I can exert dominion and control over it. If I can’t, then I don’t own it, at least for long. This is getting pretty close to the real issue you (and other) have with the concept of IP. I will try to explain it in a few words.

There are only a couple of ways I can protect my property from conquest. I can be the biggest and baddest dude around. I can hire the local mafia to come when I call. I can hire a private “court”, but as even the Murray the king of Ancap says, to do that there would have to be a common agreement on a code of laws. That starts sounding like government to me, but let’s ignore that for the moment.

Or I can take that last, fatal step and VOLUNTARILY GRANT A MONOPOLY IN RETALIATION (ENFORCEMENT) TO A GOVERNMENT AGENT IN EXCHANGE FOR THE IMPARTIAL RULE OF LAW FOR BOTH THE VICTIM AND THE ACCUSED. That definitely IS government. Or I can let this government run wild and I have arrived at the ultimate boogey man, THE STATE!

All of these solutions require either the rule of violence or the rule of law. If you deny the rule of law, then you deny everything except violence. If you deny violence, then you accept the rule of law, no matter how you enforce it. I

f you accept the rule of law, you are going to be hard pressed to deny government, because a group of private agencies that agree on a common code of law is pretty close to government. But if you think all governments eventually become States, no matter what, well then, you can’t have that. Solution: Anarchism. No law, no state, no problem.

Kinsella said these two things: “We have IP because we have a state.”, and “You don’t have to be a consistent libertarian (anarchist) to understand that IP is nonsense, just consistent enough.”

Do you see my point?

“This is all very different question from the issue of patents and copyrights, which is whether the pattern of ink (or construction materials) can, itself, be owned, apart from the goods themselves.”

Do you see how you (and others) equivocate? Do you really think a novel is just a pattern of ink on paper? If that was the case, monkeys could write books, and books would be worthless. Is that reality? Of course not, but stating the case this way makes it seem more sensible to defend your right to misappropriate the production output of someone else, without making the same investment in the production process that the producer made. By so doing, you make the producer your slave. It seems absurd when put in those terms, but that is exactly your conclusion.

IP law specifically distinguishes this issue in the determination of trade secret misappropriation. One of the tests for misappropriation concerns the issue of reverse-engineering, which is allowed specifically in acquisition of a protected trade secret on the theory that the reverse-engineer is investing in the process at an “equivalent” level to the original holder, and therefore he is free to use the secret without liability. If you fly over the factory and take a picture, you have not, and you are liable for misappropriation.

“not just the goods you own, but an entire CLASS of goods…”

My copyright of a book gives me no rights in ALL books. My patent of a mousetrap does not give me rights in ALL mousetraps. My trade secrets in a manufacturing process give me no rights in ALL manufacturing processes. Right?

“A claim of monopoly is that you can control others to the extent they interfere with your SALE of a CLASS of something.”

You arrive here by paths unknown and unexplored.

“If I own a stack of clean paper and a typewriter in front of me, I can use them however I want in the privacy of my room, and I can sell the pages to anyone who wants to buy them. That’s because I own the paper, and I own the ink.”

Are you really suggesting that anyone is going to buy paper from you with random, meaningless marks on them? Good luck.

“Copyright asserts that if I make marks on the paper that form a pattern that is too similar to someone else’s marks”

Whereas I have heard that given enough time, even a monkey could write the Encyclopedia Britannica, 1954 edition, it hasn’t happened yet. By the same token, what is the probability that your random marks, which are in such demand, are going to resemble any other page of random marks. When you give this argument the sniff test, it stinks.

However, what is the chance that your marks would be identical to mine if you used a photocopier? Why would you want to copy my random marks? Why not make your own, since they are only random anyway? I’m sure your random marks would be just as important to society as say, those in Human Action.

“The cost of production is irrelevant.”

The absurdity of this comment can be illustrated by simply asking, “What was the cost of production for Mises, in order to get his marks on the pages just so?” Do you still think that the costs of production are irrelevant? Do you think that the costs were merely the cost of buying some paper and a pen?

What shall we call these cost? What shall we name them? Let’s agree that it is the “intangible aspect of the tangible written work entitled Human Action by L.V. Mises”.

“Chefs and fashion designers get copied all the time.”

Copyright in fashion and recipes is a category of good which is treated uniquely by case law. There are many categories of goods that receive different treatment form IP laws. It is difficult to make cross comparisons, so let’s leave that one for another time.

It is a pleasure talking with you. Thank you for your interest.

I would submit that that the renting of hotel rooms is not properly categorized as a form of “monopoly,” for the simple reason that we already have a term for the kind of control that the owner of the hotel has over the letting of rooms — it’s his property. He’s the owner. He has full control of the building, which includes the right to sell (or rent) it, but that right is not dependent on the actual transaction of renting for his rights to exist. He is injured by any interference with his use, and has the right to prevent any such interference, regardless of whether it interferes with an existing or potential sale.

I have been using the term “monopoly” to describe the kind of chartered, government-sponsored decrees that have been granted throughout history — the right to be the sole importer of wheat for X country, or of cotton out of some port. By this term, I am referring to the supposed right to own all of the trade, by anyone, in whole classes of goods — which renders people unable to sell stuff they may otherwise own! The East India Trading Company was frequently granted these privileges, for example.

>>>My view is that if you deny the legitimacy of a monopoly control of the means to produce a given good, then you must also deny that property can be owned.

What is the “given good”? In the case of copyright, the claim is that it is that everyone on planet earth (or at least in the places that are reachable) cannot produce anything that even resembles the pattern of some other object. That is not a prohibition on interfering with someone’s use of a “given good.” That is a prohibition on the production and sale of a class of goods.

>>>As you can now see, you must deal with the property issue before you can discuss interference.

No, I don’t. I think this may be your root error.

You seem to think that property rights exist between an owner and an object. I know people often say that the thing owned is “his property,” but that’s a bit sloppy. A right of property does not exist between the man and the thing. The right concerns the relationship between man and other men, with regard to using some thing. The distinction is subtle, but important.

In the case of ordinary property rights (i.e., owning a bicycle or a hotel), the right of ownership is the right to exclude all other persons in the world from interfering with whatever use that you, as owner, want to make of it. The owner’s use can be anything that does not interfere with anyone else’s use of anything that THEY own.

You do not, therefore, have the right to control the behavior of other people, other than to prevent them from causing interference with your use of your stuff, because to control them in any other way necessarily means that you are interfering with their use of their bodies, which they own.

Now, you can call this right of ownership of your stuff a “monopoly,” and in a sense it sort of is, but that’s a conflation that blurs the distinction between true property and copyright/patents (which are false or metaphorical property). It is sufficient, and thus more accurate, to say that one has the right of ownership of all of one’s goods, even if that means that, in practice, you end up owning most or all of the supply of some good that you own for the sole purpose of selling. The mere fact you own all or most of the supply does not, in itself, defeat your basic right of ownership that you have otherwise justly acquired in those goods (i.e., through homesteading, other labor or trade).

I think this was the point Mises was getting at — that property rights are inviolate, and if the extent of your ownership amounts to a monopoly of the supply of something in practice, then so be it. He made this point to rebut the indefensible argument, often made, that if you own enough of something to amount to a de facto monopoly, then somehow your property rights don’t exist any more — that the point at which someone achieves a monopoly status, even through just and proper means, was also the point when his property rights ended. Mises rejected that, and defending the idea that If you own it, you own it, even if that means you own all of it.

This is all very different question from the issue of patents and copyrights, which is whether the pattern of ink (or construction materials) can, itself, be owned, apart from the goods themselves.

I submit it cannot, because doing so means that you are asserting an indefensible legal right to monopolize not just the goods you own, but an entire CLASS of goods, over which you have no prior right of ownership, and the use of which can cause no interference in your use of your goods.

So, let’s separate property and monopoly. A claim of property is that you can control others to the extent they interfere with your use of something. A claim of monopoly is that you can control others to the extent they interfere with your SALE of a CLASS of something.

These are two entirely different forms of interference. When you assert a claim of ordinary property (e.g., in a bicycle) you are asserting the right to control other people if they interfere with your use of the owned thing. However, when you assert a monopoly right, you are asserting the right to control other people if they interfere with your sale of a CLASS of goods to any potential buyer out there. Not just one pile of wheat, but ALL wheat. Not these 8 tons of iron, but all iron.

Therefore, property rights are defined by the nature of the interference. I do not have to deal with property first, then interference. It is the interference that defines the property rights.

If I own a stack of clean paper and a typewriter in front of me, I can use them however I want in the privacy of my room, and I can sell the pages to anyone who wants to buy them. That’s because I own the paper, and I own the ink. Copyright asserts that if I make marks on the paper that form a pattern that is too similar to someone else’s marks, then I can’t use my paper and ink in that manner, and even if I am allowed to mark up my own paper, I certainly can’t sell it. Why? Because someone claims the right to all of the sales of that class of good — books about X.

>>>What you neglect to consider is the cost of production.

The cost of production is irrelevant. Just like Mises was saying about being such a good businessman that you end up with a de facto monopoly of something, the right of ownership is superior to what one market participant sees as an excessive cost. The market effects do not defeat, or limit, the right in property.

If that means that producers who get copied have to build that cost into their calculations when deciding what to produce and how to produce it, then so be it.

Chefs and fashion designers get copied all the time. They adapted their business models to deal with that, without (until very recently) crying to the State to grant them a monopoly privilege over every type of thing they claim to invent.